The Office of Management and Budget should do more to help federal agencies cover the upfront costs associated with projects that will improve efficiency and save money in the long run, the Government Accountability Office recommended in a new report.

The report, which gives agencies advice on streamlining operations in response to budget pressure and a 2010 performance management law, recommended that the OMB director "work with Congress and federal agencies to develop proposals for funding mechanisms" that will assist "longer-term efficiency improvement projects." GAO noted that, if handled correctly, such investments would pay off with savings greater than or equal to the amount of initial funding.

GAO singled out one recent initiative as showing promise: an OMB venture that gives seed money to pilot programs singularly focused on increasing government efficiency. OMB formed the Partnership Fund for Program Integrity Innovation in fiscal 2010 for a three-year trial run and since then has provided $8.25 million of an appropriated $32.5 million to five pilot projects. One such project streamlines state access to information on the Agriculture Department's Supplemental Nutrition Assistance Program to avoid wasteful overlaps with other programs that serve similar purposes. Another shares a Medicaid provider enrollment system among a group of states to save the Health and Human Services Department time and resources.

Partner4Solutions.gov, the Partnership Fund's website, estimates that these projects, if properly implemented, could save the federal government more than $200 million annually. The site encourages members of the public to submit efficiency ideas.

For the report, GAO surveyed existing efficiency initiatives within federal agencies and state governments, such as the Homeland Security Department's Efficiency Review and the state of Texas' Sunset Advisory Commission, to provide a blueprint for the best strategies going forward.

The congressional watchdog emphasized the importance of funding both short- and long-term efficiency initiatives as one of three broad tips for streamlining operations. The other two are improving management skills, through tactics such as setting timelines and designating implementation teams; and building the capacity to operate more effectively by, for example, soliciting input from business and government experts.

GAO, which is facing its own budget cuts in fiscal 2012, held up the Partnership Fund's promise for long-term viability as an example of an efficiency initiative that should be expanded and replicated governmentwide.

In addition, GAO recommended creating a separate pilot program to fund projects with a more substantial upfront investment and authorizing more federal agencies to allocate larger portions of their budgets to efficiency-related projects.

In a response to GAO's preliminary report, OMB officials said the study should have highlighted more of the Obama administration's efforts to increase federal efficiency, including quarterly reviews of employee progress on priority goals and the Securing Americans Value and Efficiency award, which is presented annually to federal employees who submit practical cost-cutting ideas. OMB did not comment on GAO's suggestion to set up a funding source for long-term projects.

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